Sunday, August 16, 2015

China’s Devaluation: Much More Trouble to Come?

The fact that leaders in Beijing determined that devaluation is necessary is more evidence that the economic troubles we’ve been seeing in China are more than a blip on the screen.


Josh said...

Their crash was blamed upon western financial entities.

Their devaluation is a direct attack upon foreign currencies, the US in particular.

China is also upset about being denied sdr rights by imf;

Something to consider is Japan was brought to attack the US by the Roosevelt economic blockade of Japan. Slapping the chicoms in the face with the imf, and attacking their stock market covertly seems like a good way to start ww3.

Anonymous said...

Maybe the ChiComs should stop hacking American government computer networks and smirking about it to the world press. Provocation runs both ways.

Beijing has been spoiling for a fight since the 1990s. I remember when they threatened to nuke Los Angeles if the US dared to interfere with their Anschluss with Taiwan. This did not deter Slick Willie from giving them Most Favored Nation status a few months later, of course.

It seems to me, though, that a nation as dependent on foreign exports as China, and one that may or may not be self-sufficient in terms of food, should step lightly just in case the one nation willing to buy rubber dog turds made by Chinese political prisoners decides it can live without them.

Yes, I know, in theory China became a net food exporter in 2002--according to Chinese government figures rubberstamped by the WTO. Given that Chinese government official pronouncements pertaining to their economy are 100% smoke and mirrors, I wouldn't bet on that being true forever, or even true today, given the vast demographic shifts within China over the past decade as illiterate peasant farmers from the interior travel (mainly illegally) to the cities in search of higher paying work. That rice ain't going to grow itself.

And I can't help but notice that Chinese imports of food--wheat, corn, soybeans--from the US go up, up, up every year, despite flatlining population growth in China, despite Chinese government claims that the latest Five-Year Plan to improve agricultural productivity has once again been a tremendous success, despite numerous Chinese government projects like the Three Gorges Dam that have inundated, depopulated, or poisoned tens of thousands of square miles of their most productive agricultural land. And the imports of American soybeans keep going up, up, up, even as the Chinese devalue their own currency, making the food we're growing that much more expensive for them. I'm thinking they just might need it pretty badly. And I'm thinking that any official information from the Chinese government pertaining to their economy, or anything else, should really be taken with a grain of salt.

Chiu ChunLing said...

If only the U.S. hadn't already effectively lost WWIII by apparently sleeping through the critical early developments.